A British Virgin Islands court froze $1.14 billion in assets belonging to the founders of Three Arrows Capital (3AC), Su Zhu, Kyle Davies, and his wife, Kelly Chen, Bloomberg reported on Dec. 21, citing an emailed statement from the bankrupt hedge fund liquidator Teneo.
The freezing order has global implications, impacting the founders’ assets worldwide. Teneo asserted that the founders should be held accountable for causing 3AC’s financial decline equal to the freezing orders sought.
The liquidator also reportedly secured a domestic freezing order from a Singapore court, as the bankrupt firm operated in the Asian country before its collapse.
Last year, 3AC filed for bankruptcy in the British Virgin Islands following a record market downturn that significantly impacted other crypto companies like Celsius.
The hedge fund previously held a prominent position in the crypto industry and had substantial investment stakes in projects such as Terra’s LUNA and Solana. At its peak, the firm managed around $18 billion of digital assets.
Although it has been over a year since the hedge fund’s bankruptcy filing, a clear resolution pathway has yet to emerge due to the founders’ lack of meaningful cooperation in the asset recovery process, leading to legal consequences.
Zhu was imprisoned for four months for contempt of court due to non-compliance with orders and is currently serving the committal order. However, CryptoSlate reported that his release is imminent as he was of good behavior during the period of custody.
Meanwhile, Davies faces a similar order, though his whereabouts remain unknown.
Additionally, the Monetary Authority of Singapore (MAS) has banned both from regulated investment activities for nine years.
Notwithstanding the orders and bans, Zhu and Davies remain actively involved in crypto ventures. They collaborated with CoinFLEX CEO Mark Lamb in early 2023 to launch OPNX, an exchange for trading crypto bankruptcy claims.
